Sainsbury's creating new supply chain model

Will Green is news editor of Supply Management
28 April 2021

Sainsbury’s is creating a new supply chain and logistics operating model as part of work to cut costs from the business.

The supermarket said the work involved integrating operations between Argos and Sainsbury’s and would contribute towards savings of £150m in supply chain and logistics between 2019/20 and 2022/23.

In results to 6 March 2021 Sainsbury’s said: “The group is creating a new supply chain and logistics operating model, moving to a single integrated supply chain and logistics network across Sainsbury’s and Argos. As a result of this, a number of existing depots are closing.

“Further, the group has reviewed its Store Support Centre ways of working and as a result is reducing its office space.”

The supermarket reported a loss of £261m on revenues of £29bn, down on profits of £255m in 2019/20. It said responding to the coronavirus pandemic had added costs of £485m.

Simon Roberts told a call with investors: “We have completely changed the way we govern cost management in the business and this is giving us the confidence that we can deliver the step-up in cost savings that we are targeting this year and beyond.

“Overall we have mobilised a significant cost change effort and we are making big choices, from resourcing our business more effectively to fundamentally reorganising our supply chains.”

Roberts said the company was rolling out an “integrated transport planning system” and rationalising its depots, of which four would close.

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